“Tying the Marriage Money Knot” 3-part Plan
-By Utah Central Credit Union
August 19th 2009
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If you are planning to get married, STOP, LOOK, and LISTEN. If you and your partner have not thoroughly discussed your financial future by now, you may be setting yourself up for money difficulty or even worse, a failed marriage. In a study commissioned by SmartMoney Magazine and Redbook in 2004, 70% of couples talk about money on a weekly basis but numerous studies show that finances are the No. 1 reason why couples argue.
Nearly 80% site financial problems as the leading cause of divorce. And since one out of every two marriage ends in divorce these days, it’s clear that if you plan on tying a marriage knot that lasts, you need to tie a financial knot that you can make work throughout your life together.
Before-the-wedding financial checklist
1) STOP: Make a budget together — As the saying goes, “nobody plans to fail, they just fail to plan.” If you are in the wedding “planning mode” anyway, it is crucial that you add a marriage budget plan to your list. You will be much happier crossing the threshold knowing you have a financial plan in place. List all of your income and assets. Then list all of your current or potential debts and obligations. That way you’ll know where you are at once the knot is tied rather than toiling through that after the wedding party is over. This might even influence what you spend on your wedding – remember, you can have a fancy wedding for less money.
2) LOOK: Review each other’s financial history —It may be a good idea to review your credit reports together so there are no surprises once you’ve tied the knot (www.freecreditreport.com). Often couples discuss general finances prior to marriage, but fail to review all of the details together. To save frustrations right from the get go, cover all the of the following financial areas:
· Do either of you have debt? Make a list of debts.
· List the money each of you have on hand.
· Discuss your savings and investment goals (it’s not too early to do this).
· Talk about your philosophy about money.
· What will your combined incomes be?
· Discuss your typical spending habits currently.
3) LISTEN: Discuss how you will merge your finances — According to studies, the most successful marriage use an “it’s yours, mine, and ours” approach. One of the best ideas is to immediately open a joint checking account together. Most institutions have great checking accounts with online account and bill payment features. This simplifies things. Designate one of you to pay the bills and the other one to balance the account. That way, you’ll both stay informed. Plus, you can each create a separate account to transfer a set amount on a regular basis so you each have your own spending money for treats, movies, lunches out, and buy presents for each other. Only spend your set personal allowance and keep it separate from your billpay account (make it an actual weekly or monthly budget item).
We have provided you with these simple steps to help you communicate and start a successful journey together. Utah Central Credit Union is committed to supporting strong marriages by providing sound financial tools for couples-to-be. Go to www.utahcentral.com and click on our newlywed services for loans, savings, joint accounts, and Visa products designed for your success. Take advantage of the Central Rewards® $50 wedding gift when you open a joint account together complete with Central Online and BillPay as well as a slick online budget tool called FinanceWorks™.
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